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Tuesday, June 18, 2013

Algo-Trading for the Retail Trader/Investor

I’d like to share
with readers a rather interesting CNBC segment on maintaining a level playing
field for the average retail trader/investor.

Maria
Bartiromo introduced the story (see CNBC video below) by Bob Pisani, which centers
on a company called Equametrics,
who specialize in bringing the power of automated trading used by banks and hedge
funds to the retail investor.

Although
I can attest to the success that comes with the discipline associated with
automating a proven trading/investment strategy, I do not believe the average
retail trader/investor has the time or tenacity to develop and implement such strategies
successfully.

Despite
being a huge proponent of electronic trading, do be advised that the custom algorithms
that banks and hedge funds employ are not the off-the-shelf indicators that are
commonly available by Equametrics or any other automated trading platform.

Basic
off-the-shelf indicators like the MACD or 200-day Moving Average are great
tools to garnish a quick snapshot of the current state of the market however;
they fail miserably when translated into an automated/electronic trading
strategy.

Trust
me, after more than 5,000 hours of time, research, and real-time
experience in developing, monitoring, and using automated trading strategies, I
should know.

Insofar
as advice for the average retail trader/investor considering Equametrics, I
would provide the following:

Canned
(off-the-shelf) indicators do not work as automated investing strategies.

Standard
indicator inputs typically need modifications in combination with other
input variables or custom indicators in order to produce profitable
strategies over the long haul.

The
learning curve is enormous and impractical for the average retail
trader/investor to undertake.

At
$99 - $250 per month for an
education/execution platform is rather expensive, and for the majority, a
losing proposition for all but the most tenacious and wealthy retail
investors with plenty of time and money to blow.

If
you are committed and passionate about developing and using automated
trading strategies, read some books and do a fair amount of due diligence prior
to jumping right into shark infested waters.

If
you wish to gain the benefits of a disciplined electronic trading or
investment strategy, find or follow one that has a proven and verifiable record
of accomplishment.

Using a proven long-term algorithm for the S&P
500, Gold, and Silver markets, we are virtually giving away an effective and simple
solution
for the average retail investor to grow and safeguard their
nest eggs.

If you are not sure what kind of trader/investor you
are, click
here
to find out which of our electronic trading-alert services might
suite you best.